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Featured Mergers and Acquisitions

Simon strikes $3.6B deal to buy Taubman

In a deal valued at $3.6 billion, Simon Property Group is buying mall operator Taubman Realty.

Simon will acquire an 80 percent ownership interest in the Taubman partnership (TRG) at $52.50 per share in cash.

The Taubman family will sell one-third of its ownership interest and remain a 20 percent partner.

“By joining together, we will enhance the ability of TRG to invest in innovative retail environments that create exciting shopping and entertainment experiences for consumers, immersive opportunities for retailers, and substantial new job prospects for local communities,” said Simon chairman David Simon.

TRG owns or manages 26 super-regional shopping centers in the U.S. and Asia consisting of 25 million feet. It will continue to be managed by its existing executive team, under the leadership of chairman Robert S. Taubman, in partnership with Simon.

The parties are looking to achieve “operational efficiencies” something analysts say could be significant.Jim Sullivan, BTIG managing director and REIT Analys said, “Simon has a superior balance sheet and better access to capital than any other retail REIT and operates its portfolio with impressive scale that results in the highest operating margin of any company in the sector. So we assume that Simon believes that it would be able to reduce interest and operating costs materially for any company that it would acquire.”

Taubman said, “Since Taubman Centers’ founding 70 years ago, we have built a portfolio of high-quality assets and continuously adapted to the evolving retail landscape. I am proud of all that this company’s talented employees have achieved and am thrilled to have the opportunity to join together with Simon through this joint venture. Over the last few years,

“The Board and I are confident that Simon is the ideal partner to help us build on our progress.”

Picture top: Taubman-owned Stamford Town Center mall

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